SMB: In-House or Outsource Your

IT & Software Dev Team?

Successful Outsourcing

IT & Software Dev in SMBs• Small to Medium-Sized Businesses (SMBs) are spending from

1-10% of their annual revenue on technology (resources, infrastructure & services)• Quickly changing as a whole from low use of IT to reliance on

technology (in many cases) as a part of strategic capabilities• Manufacturing & retail tend to be on the low-end of IT use

• Custom manufacturing and retail with significant e-commerce & supply-chain integration can be on the other end of the scale – with high reliance on IT

• Finance & healthcare tend to be at high end with security, process automation, record retention & virtualization among key needs• Service industries range all over depending on their specialization

and need for market access

Technology in SMBs Will Continue to Grow• How can/will SMBs manage IT spend and risk?• What percent of annual revenue is reasonable for IT

and software?• Can you afford to wait – sit on your hands – while more

nimble competitors snap at your margin and capture new business?• You need to secure your existing lines of business and

break new ground. Can you leverage your intellectual property effectively in a technology play? • BUT – should you spend your time and cash to do what

is needed in-house or outsource???

What Do SMBs Need?What Choices are on the Table?• Almost anything in technology can be outsourced – directly or

though services that manage systems & resources across several providers• SMBs are moving away from “hard infrastructure” to

virtualization for hardware and software• Amazon Web Services (AWS), Microsoft Azure, & Google Cloud – with

many providers that bundle and package services for SMB market• Lots of options and capabilities available and cost-effective

for SMBs• But 94% of SMB operations do not have the skill sets to leverage,

implement and maintain the capabilities of virtualized infrastructure, software & services

Virtualized Servers & SoftwareProvides • Scalable in both data

& processing capacity – up & down – with pay for use pricing

• Always on, always current technology

• Accessible across a wide range of devices, locations and situations

• Opens the capability for business-to-business automated transactions to the SMB market

But…• Do SMBs have the

resources and skills in-house that an configure, manage and maintain these systems? Can they maintain them in a highly competitive resource market? Can their resources keep up with the field?

• If technology is not really your business focus, does it make sense to build an in-house capability? Even if it is – should your focus extend to this field and to what extent?

Software Design & Development• Increasingly, software drives business

• Strategic applications for line of business (LOB) e-commerce, SaaS, mobile• Allows SMBs to reach new clients on new platforms, automate proprietary

services & supply chains, gain a strategic presence where there are less competitors, etc.

• Many standard applications available per user/use, 24X7, as SaaS – allowing users to participate with nothing more than a network connection and a device

• SMBs transitioning to custom apps• Often start by leveraging online services – groupware spreadsheets & doc

pools that don’t scale well and are maintained by a few dedicated users • When the ad-hoc system begins to show strain – can an in-house team

develop and maintain a better, app-based approach? Do they have the skills & experience needed?

Security & QA• Data Security and Reliability has become a standard business risk for all

companies from global enterprise to SMBs• Most businesses have to be connected to global networks at some level – but maintaining

secure private data and systems is a constant threat• SMBs generally don’t have the financial resources to deal with outages or data

losses lasting more than a few hours. • Days or weeks of dealing with outages or threats can sink operations entirely

• Regular security audits, threat anticipation, intrusion mitigation and more are all part of the toolset for both in-house & virtualized systems

• Number & type of systems accessing data is constantly changing• QA extends beyond ”fit-for-use” on day one of production to an ongoing need through the life

of apps & services. Assess & make change strategically instead of as a reaction to issues• For SMBs, these needs can be an unpleasant surprise when problems come up that

are beyond their skills• Maintaining security & QA expertise in-house can be an expensive proposition

Decision Drivers• Some issues we hear our SMB clients working through

when considering in-house vs outsourced IT & software dev• Is their strategic line of business in technology?

• Should you spend time & resources on a fast-changing technical field outside your focus?

• Would you be better off focusing on your customer and customer-focused direct services? Can a technical partner cover needs better and at a reasonable cost?

• Literally thousands of IT & software development providers globally• SMBs need to ask, “what am I comfortable with?” Do you need a

vendor who has 1,000’s of clients, is really inexpensive but only available out of business hours?

• Trade-offs in price, services available, skills, experience, quality & working hours are part of decision – what will work best for your situation?

Outsourcing is Not – All or Nothing• Even for businesses that are

strongly driven by technology, the skillsets needed for current IT and software development may be hard for SMBs to acquire & maintain in-house• Outsourcing in these cases often

means finding a vendor that can integrate into their team, adding the skills and experience needed, along with the ability to work in real-time directly with in-house teams

Outsourcing is Not – All or Nothing• SMBs often deal with peaks & valleys of

work that make it difficult to maintain a stable, skilled, in-house team• Partners need to be able to help them scale

up and down in both resources and system capacity

• Hiring new resources can take from 3-6 months to have a fully productive resource

• For an SMB – lags to starting projects, filling needs can be a serious problem

• If a vendor can fill the need quickly with resources ready to go – the partnership becomes a valuable part of business capability. Contacts can become an opportunity to define scope of work, project terms, responsibilities and more that can be hard to negotiate with internal resources

Outsourcing is Not – All or Nothing• In-house teams have a deep understanding of existing

systems, customers & proprietary business advantage• But they often are limited in exposure to a broad range of

current technology, plug & play approaches that could shorten development, and new device requirements• Finding vendors that can bridge the gaps & work with the

internal team as a combined approach is key. Supplanting an existing team can be a serious loss for an SMB. • Implies a need for a smaller, more nimble outsourcing

vendor who can focus on needs, overcome cultural and communication barriers, that has established processes & procedures to bring combined teams together

Bottom Line• The access to information technology and services has

never been better for SMBs and will continue to improve• But with the promise – there are serious decisions to be

made over the energy and focus to put into the area• The choices have a lot in common with any critical business

decision• Time-to-market, access to resources & experience, build-or-buy,

scalability & risk management• If you decide to outsource some or all of your IT and

software development needs, the key is to find a vendor you can work with at a partner-level, over the long run• Changing horses in midstream is not an attractive option for

anyone

We’re Scio• We are an outsourcing provider of

IT and software development services for our clients in North America• We solve many of the problems

of our SMB customers with a range of services and resources available in real-time, on demand• We are aware of the business

climate, communications needs and culture in the US – because that is where the majority of our clients work every day

We’re Scio• We leverage cloud services and

systems for clients large and small, in a variety of industries

• Our broad range of experience & skill is a critical advantage for our SMB customers. It allows them to be more flexible & capable without losing their business focus

• Whether you need a mobile app, to migrate your internal apps to a more maintainable and scalable environment, or build your next strategic advantage – we can help.

• Contact Us.